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News & Analysis

5 things you should know about tech today

- June 29, 2020 4 MIN READ
Screenshot: Zoox

Happy Monday all.

Two more sleeps to a new financial year. Here’s what’s happening.

Don’t forget to tune into the Startup Daily show on the business TV streaming channel ausbiz.com.au every weekday, 2-3pm, where we talk to startup founders, investors and innovators about everything tech.

If you’ve missed an episode, you can catch up on the ausbiz site here.

 

1.  Amazon buys Zoox

One of the world’s worst kept M&A secrets was finally confirmed on the weekend when Amazon’s plan to buy six-year-old US-based self-driving car startup Zoox, reportedly for US$1.2 billion, officially surfaced.

Zoox was co-founded by Australian Tim Kentley-Klay, alongside Jesse Levinson (whose dad is Apple and Calico chairman) and counts Atlassian’s Mike Cannon-Brookes among its investors, alongside Sydney VC Alium Capital.

It’s good news for the 900 -people strong venture, which mucked around in Toyota Highlanders, but set itself the monumental task (just ask James Dyson) of building a car from scratch, and was running out of cash to achieve that goal.

Levinson is staying on with the business as CTO with CEO Aicha Evans.

Tesla’s Elon Musk shared his view on the Amazon deal.

https://twitter.com/elonmusk/status/1276568125060689924

 

2. Servcorp trims US expansion

Pioneering WeWork rival Servcorp, the ASX-listed office, co-working space and IT services provider, is pulling back on its US expansion, closing 12 of its 22 office locations that were costing the company $5 million annually in losses. The shutdowns are expected to cost the business $5.5 milllion.

They’re keeping five sites in New York, two each in Houston and Chicago and one in Washington DC

Business streaming channel ausbiz spoke to CEO Alf Mouffarige about the decision.

“We’ve never understood the US market and they’ve never really understood us,” he told ausbiz.

Mouffarige said the sites Servcorp is closing  “didn’t even look like coming to profitability pre the corona crisis. Post it, they were a bit of a disaster so we decided to shutter those centres.”

He said that the co-working business had evaporated, but the company had benefited from the working-from-home boom.

You can watch the ausbiz interview here.

3. How to raise

Startup hub Stone & Chalk has compiled a comprehensive capital raising guide for startup founders in collaboration with venture capital firms such as Right Click Capital Reinventure, Airtree, NAB Ventures and Jelix Ventures and even the ASX, which launches this Wednesday, July 1.

The guide demystifies the process of capital raising alongside explaining the pitfalls and promises so founders to make the best decision for their startup

Virtual launch event at 12pm, this Wednesday, July 1, and you can turn in to watch as Stone & Chalk’s National Head of Community, Cheryl Mack chats with leading venturec capitalists Simon Cant, co-founder and Managing Partner at Reinventure; Michael Dovey, General Partner, IAG Firemark Ventures; Andrea Gardiner, founder and CEO, Jelix Ventures; and Chris Quirk, Investment Manager, Rampersand.

Book here on Humanitix to be a virtual part of it.

4. Ian Mason’s new gig

Former Virgin StartUp boss Ian Mason’s is joining Canvas Coworking’s FLAIR (Female-Led Aspiring International Regional) incubator program as Entrepreneur-in-Residence when the four-month entrepreneurial support program for regional women rolls out in August.

Mason, along with dozens of local and global mentors, will be facilitating online and in-person workshops designed to develop entrepreneurial skills, behaviours and connections.

“Participants can expect no jargon, no nonsense, no egos and no wasted time, just practical, straight forward support and advice to help you achieve your goals,” he said.

“The FLAIR Incubator is the perfect testing ground for those founders that are looking to get their business into the shape needed to grow rapidly and explore the opportunities presented by international markets.”

Regional businesses looking to target international markets can now apply for the FLAIR Incubator program and gain access to the tailored 16-week program.

To find out more and apply, head to canvascoworking.com.au/flair

5. MYOB’s JobKeeper snapshot

Accounting software company MYOB has revealed the importance of JobKeeper to the local economy in the latest edition of its long-running Business Monitor survey and the results are dramatic.

84% of small business owners eligible for the JobKeeper program reported the subsidy allowed them to continue trading, and they thing the Morrison government’s done a good job, with 71% saying the response is better than the US, and 68% saying it beats the UK.

The research also found:

  • 68% say their revenue is down due to the impact of COVID-19

  • 1 in 5 small businesses were very unprepared for the pandemic to hit

  • 26% of small businesses say the impact of the epidemic will last at least a year or two

  • 1 in 4 respondents think the Australian government responded better to the pandemic than New Zealand

  • Of those businesses that were eligible for the JobKeeper program, 84% of small businesses said JobKeeper will allow their business to keep running

  • 24% say their business has or will have to permanently close

MYOB surveyed more than 1,000 Australian SMEs between April and May.

MYOB Economist Jon Manning said some small business owners believe their recovery will take only a few months while others are expecting it to take years.

“93% small business owners have told us they have seen a reduction in work due to the pandemic. Over the next three to six months 52% of respondents say they expect their revenue to decrease by 20% or more,” he said.

“By industry we can see 35% of Transport, Postal and Warehousing industry believe the disruption will impact their business for up to 6 months’ time whereas 24% of the Retail and Hospitality industry believe it will take between one and two years for their business to bounce back.”